United States v. Blake

U.S. DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
Taxation

New York Law Journal

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Judge Arthur Spatt

Talbot died in 1989. Her will appointed daughter Betty Blake executrix, and granddaughter Nancy as successor executrix. The IRS' assessment of estate tax deficiencies dated to 1991. It was never informed of Betty's June 2005 death. Talbot's estate defaulted on an Aug. 11, 1995, agreement to pay the estate tax liability—by then $560,214 plus accrual—by making monthly payments. The IRS's June 17, 2005, letter—before Betty's death—informed that the outstanding balance exceeded $1.11 million. To recover thereon the IRS placed tax liens on properties owned by Nancy. The government's May 2012 complaint to collect $456,775 in estate taxes, plus statutory additions, was filed while Nancy's quiet title action was ongoing. Finding the government's enforcement action and the quiet title action parallel, district court abstained from exercising jurisdiction. The six Colorado River factors supported abstention. The parties' dispute involved a res over which state court had assumed jurisdiction. Also, although resolution of the enforcement action partly depends on application of federal tax law as to the 10-year statute of limitations period, it also relies heavily on New York law, which will ultimately decide the government's claim.

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